The Bond Market Is Flashing Danger — And AI Is A Bubble | Jesse Felder

Summary

Jesse Felder argues we are in a secular inflationary era driven by deglobalization, debt, and underinvestment in commodities. He recommends shifting from financial assets to real assets like gold, energy stocks, and TIPS. He warns that the AI boom resembles the dot-com bubble and that bond yields are poised to break higher, threatening stocks.

• Jesse Felder highlights the bond market as the most important chart, warning of a breakout in long-term yields above 5%.
• He believes the 2020s are a secular inflationary era, not a transitory phase.
• Underinvestment in commodities and energy over the past decade creates structural shortages and higher prices.
• Gold is a leading indicator for inflation and commodity prices; he recommends overweighting real assets.
• Oil is dramatically undervalued relative to gold, supporting a long energy position.
• He compares the AI boom to the dot-com bubble, pointing to declining free cash flow at hyperscalers.
• Hyperscalers face massive future depreciation charges that could crush reported earnings.
• Jesse expects the Fed may be forced to hike rates, not cut, due to persistent inflation.